A novel and promising approach for achieving bony repair especially for large bone defects is to transplant human bone marrow stromal cells or mesenchymal stem cells (hMSCs). Culture expanded hMSCs, transplanted into immuno-compromised recipient mice on porous Hydroxyapatite (HAP) or Tri-calcium phosphate (TCP) ceramic carriers, have demonstrated significant osteogenic potential. Owing to their direct bone bonding capability, such ceramics are known as bioactive. However, these ceramics are not indicated for load bearing grafts without secondary hardware, owing to their inherently low mechanical properties. A new class of porous cortico-cancellous structured ceramics (CSC) have shown adequate strength and high bioactivity/ingrowth in a sheep model. The key question is: What is the response and differentiation and proliferation of hMSCs around and within the CSC grafts? In the Phase 1 program, this question will be answered by optimizing the porosity and pore size of the CSC grafts for strength and hMSC loading/delivery. The biomechanical properties will be determined and in-vitro hMSC attachment and proliferation of CSC graft/hMSC composites will be assessed. Well-established and published protocols, will be used to determine the osteogenic potential of these graft-hMSC composites in a sub-cutaneous site using immuno-compromised nude mice. Standard HAP/TCP grafts will be used as a control. Both qualitative and quantitative histo-morphometry will be used to comprehensively assess the bone formation in these novel grafts. By comparing the quality and extent of new bone formation in the CSC grafts with the control and previous results on ceramic carriers, we will establish the merit and feasibility of the novel CSC graft-hMSC composites as load bearing, bioactive, biomimetic scaffolds for enhanced bony repair.